8 RADY RELATIVES SUE, SAY HE RENEGED ON BUYOUT

Relatives of La Jolla businessman and philanthropist Ernest Rady claim he offered to buy them out of the family’s holding company more than four years ago but later reneged on the multimillion-dollar deal.

The relatives — Rady’s nieces and nephews, most of whom are from Canada — filed a lawsuit against their uncle in 2009, prodding him to honor his promise to buy them out of American Assets Inc.

Failing to do so, the plaintiffs’ lawyer told a jury this week, leaves the relatives open to tax consequences that could be “devastating.”

“They wanted out and this seemed like a good deal to them, and it also seemed like a good deal to their uncle,” attorney Bill Hebert said in San Diego Superior Court.

The eight plaintiffs are seeking about $200 million in damages.

Rady’s lawyers say their client made no official offer. Instead, he sent emails to the family members starting in 2007 to gauge their interest in a buyout, with the understanding that any deal that arose afterward would hinge on Rady’s ability to secure financing.

By 2008, the United States was embroiled in a financial crisis, and Rady was unable to move forward with the proposal, his lawyer said.

“The contract they want you to enforce is based on a memo,” Steven Strauss said Tuesday during his opening statement to the jury.

“It was not a binding legal offer, and the plaintiffs know that,” Strauss said.

Both lawyers said outside the courtroom that the lawsuit would not have any effect on the $60 million donation to Rady Children’s Hospital that gave the facility its current name.

Rady, 74, who along with his two sisters inherited money from his mother, managed the family’s holdings in Canada for years and later spent more than 40 years building up American Assets after he moved to California.

The San Diego-based conglomerate is involved in real estate development, financial services and investment management.

Rady’s net worth was estimated at $1.6 billion in 2008, according to Forbes magazine.

Dana Littlefield • U-T

Arsonist caught on video pleads guilty, could get 3 years

la mesa

The security video behind a La Mesa-area bar shows a man in a blue shirt pile up a few tufts of dry grass, ignite them with his lighter and, while flames race uphill, carefully stub out his cigarette and go back inside the bar.

Faced with that video evidence, Michael Joseph Morris, 51, pleaded guilty to one count of arson last month and faces up to three years in prison when he is sentenced on March 28, authorities said Tuesday.

“I’ve never before been able to see an arsonist on video in my 29-year career,” Battalion Chief Andy Menshek of the San Miguel Fire Protection District said Tuesday.

The Sept. 6 blaze Morris casually set behind Manny’s Cocktails in a strip mall on Broadway at Spring Street threatened as many as 16 homes on Polaris and Kenwood drives, Menshek said. Temperatures in the high 90s and dry fuel conditions contributed to the fire spreading toward the homes.

Menshek said Morris first denied setting the blaze, but when shown the video, said he wanted to burn off ants crawling on a lizard he had killed on the hillside the day before.

The video shows Morris, in a uniform work shirt with his name on it, smoking and casually leaning on a 3-foot-high retaining wall a couple of yards behind the bar. He plucks some grass, piles it at arm’s length on the hillside, and lights it. He walks a few feet, then returns and watches the flames spread for a few seconds.

“He went back in the bar and continued to drink,” Menshek said. “He didn’t tell anyone there was a fire back there.”

Investigators identified Morris as the suspect and arrested him Nov. 3 at his apartment a few blocks from the bar.

Morris posted $100,000 bail and has remained out of jail. He pleaded guilty to arson on Feb. 15.